A surreptitious trade relationship has developed in recent years between China and South Korea that has at least as much political as commercial significance.
The link with the country that Peking once scorned as a lackey of the United States came about through China's initiative, according to informed sources.
The actual transactions are carried out by third parties, permitting the two countries to pretend they do not have any commercial ties. Given the close control Peking exercises over its trade, however, there is no doubt that the decision to start exchanging goods with South Korea was made at the highest political levels.
Estimates of the amount of trade vary considerably, ranging from less than $100 million a year to as high as $400 million. China is sending such things as coal, sesame seeds and hot peppers and getting back such consumer products as black-and-white television sets and textiles.
Analysts see Peking's opening toward South Korea as a consequence of the changes in economic and political policies China has adopted since freeing itself from the rigid dictums of its late revolutionary leader and Communist Party chairman, Mao Tse-tung. As Prof. Donald Zagoria of Hunter College, an Asian specialist, put it, Peking is trying to develop more options.
Peking contends that the Soviet Union is trying to develop a network of close relations with countries bordering China. To counter this, the analysts say, China has been developing its own contacts throughout the region. They say it no longer objects to U.S. and Japanese influence on the Korean Peninsula and now accepts an economically and militarily strong South Korea.
There is a consensus among these analysts, however, that China is unlikely for the foreseeable future to go as far as establishing full diplomatic ties with South Korea. China has, however, invited South Korea to send a delegation to a conference on energy and environmental problems to be held in Peking in November.
The links between Seoul and Peking are thought to be causing consternation in North Korea, China's supposed ally. The North regards itself as the only legitimate government on the peninsula. China once sent its troops to turn back the advance of U.N. troops through North Korea, after the North had invaded the South, and for decades thereafter Peking backed North Korea wholeheartedly.
Today there appears to be an almost unbridgeable gap between North Korea, with its doctrinaire control of every facet of activity and Stalin-like cult of President Kim Il Sung, and the pragmatic leadership in Peking.
Simultaneous with the opening of trade, South Korean athletes began reporting that their Chinese counterparts, who formerly snubbed them at international competitions, had become very cordial.
Last year, a Chinese lawyer doing research at Louisiana State University was given permission to attend a conference in Seoul on problems of the sea. At that time a Japanese news agency reported that South Korean government officials confirmed that a Chinese official visited South Korea in 1980 and was shown several industrial complexes, including the steel mill at Pohang.
Sources familiar with the trade relationship say the first deals were initiated by ethnic Chinese in the United States and Hong Kong contacting South Korean traders and offering Chinese goods or seeking to buy something from South Korea.
The paperwork gives the erroneous impression that the goods are unloaded at some neutral port such as Hong Kong or Kobe, Japan. Thus, the fiction that there is no direct trade between the two countries is preserved. If occasional reports of the traffic leak out--making the political point Peking apparently wants to make--it all can be denied offhandedly as a journalist's invention. A spokesman at the South Korean Embassy here dismissed the trade as a routine occurrence and said that not much should be made of it.
There is, however, an element of businesslike practicality when it comes to the actual shipments. The freighters, one informed source said, ply steadily from Pusan in South Korea to Shanghai, back to Pusan, back to Shanghai and so forth--with no stopping off in a "neutral" port.
The procedure is not particularly new to the South Koreans, who have been doing business with the Eastern European Bloc through French and British middlemen for several years.
The shadowy relationship has had at least one embarrassment. Earlier this year the head of a Hong Kong-based company said he was trying to negotiate the hiring of as many as 100,000 Chinese laborers for a South Korean construction company for work on projects in Iraq and Saudi Arabia. The claim was denied in Peking.
The go-betweens for China on the trade negotiations, according to sources involved in the transactions, have expressed an interest in South Korea's industrial development. Since Mao's death, the pragmatic leaders who have come to the top in China have said they would be looking for development models to follow.
The Soviet Union has made only a slight opening to Seoul, going no further than permitting the occasional academician from South Korea to participate in conferences in the Soviet Union.